- A quarter of young Brits are in debt, but new research reveals viewing finances on a single digital platform could help them pay debts more quickly and save more
- Two thirds of 18-24 year olds believe it would be easier to keep on top of their finances if they could see all their financial activity in one place
- Intelligent Environments says new EU payments directive PSD2 could increase visibility and gives banks the opportunity to help put young people back in control of their finances
It’s no secret that young Britons struggle with their finances, however new research has revealed that these difficulties could be eased if all financial activity were available to view on one single digital platform.
The study, commissioned by financial technology firm Intelligent Environments, reveals that almost a quarter of 18-24 year olds (24 per cent) are currently in debt. 44 per cent of these youngsters say they struggle to manage their money, while the same proportion also say going into debt is one of their biggest causes of stress.
In particular, it seems debt collection tactics seem to be a big problem for this generation. A third (33 per cent) find debt collection agencies’ payment chasing tactics of phone calls and threatening letters very distressing, while a fifth (20 per cent) say they have purposefully avoided answering phone calls from debt collectors chasing payment.
But it seems online tools could be the key to addressing young people’s concerns about debt. More than half (53 per cent) of those in debt say they would prefer to manage it online, while almost two thirds (61 per cent) say they would feel more in control of their financial situation if they had visibility of all financial activity in one place.
Intelligent Environments is calling on financial services providers, including debt collection companies and creditors, to work more closely together, and to be more open to sharing information to provide a better, more joined-up experience for customers.
The call comes ahead of the introduction of a new EU directive which could make financial management for banking customers across the UK easier. PSD2 is a new EU-wide payments directive which allows for data sharing across multiple platforms, meaning consumers could be able to check their bank accounts, bills and debts through a single digital platform.
In addition to making finances easier to manage, the research suggests that the increase in visibility PSD2 could bring about may also have a positive benefit for lenders and creditors. More than half (53 per cent) of 18-24 year olds in debt believe they would repay all loans and debts more quickly if they had visibility of them in the same place as their credit and debit card statements. 44 per cent also believe they would save more money each month if they had visibility of all their financial activity in one place.
David Webber, managing director of Intelligent Environments, said: “This research clearly shows that customers are overwhelmed by the number of accounts they have to manage, particularly when it comes to debt. As a result, they very understandably struggle to manage their finances properly.
“However, our research shows that there’s a simple solution. By providing them with a single dashboard view, financial services providers can give Britain’s youngsters much more visibility, and help them take back control over their finances. Regardless the outcome of the EU referendum, FS providers should take advantage of the opportunity to work more closely together and share information. In doing so, they can not only enhance the customer experience they provide, but improve customers’ financial well-being in the process.”